Movies that are released in theaters can profit by ticked sold, merchandising and ad revenue but what about streaming sites originals, those only available in digital form and exclusively in their platforms?
In: Economics
TLDR: They charge subscriptions
277.65 million subscribers worldwide x $15 a user = 4.1 Billion in gross revenue per month
The cost of those shows is also partially covered by product placements within those shows/movies.
If you see a can of Coke or an Apple computer in a show you can guarantee the company paid for it to be there.
Exclusive content , especially if good or acclaimed, attract more users.
More users = more subscriptions
More subscriptions = more money
They make money by having people pay for subscriptions. The more people that sign up to watch their original shows, the more money Netflix makes. They also keep people subscribed by always adding new content, which keeps viewers excited and coming back for more. Instead of making money from ticket sales like in a theater, they profit from lots of people paying every month to watch shows at home. (mod: r/NetflixByProxy)
I tend to jump around subscription services when I run out of things to watch, but eventually I’ll want to rewatch some of my favorites and go back to Netflix for “Midnight Mass” or “The Haunting of Hill House” or go back to HBO for “Game of Thrones.”
There are other shows I’ll watch on those services, but those three in particular will always suck me back in eventually.
Because it costs money to have Netflix. These shows aren’t free. You’re paying money to be able to watch them.
Mainly they want to draw people to the platform, and then keep them their, as they are paying for it with subscription.
~~It might make more sense when you think about the other kinds of shows on Netflix.~~
~~Each time a show is watched, some amount of money is set aside to be given to the IP owner of the show. So if there’s an ABC-owned show on Netflix, every time someone watches it, a little bit of money goes to ABC.~~
~~But if it’s a Netflix original, they don’t have to pay out to anyone else and Netflix gets to keep a larger portion of the user subscription fees.~~
edit: Possibly very wrong. I read this in an engadget article a while back and can’t find the source article.
Two big tent sources of profit.
First would be the implicit marketing value. Theory goes original programs bring in new watchers(new subscription), retain current customers ready to leave(saving company from lost subscriptions), and increase value of streaming service brand.
Second would be IP, merchandising, and whatever syndication is called nowadays.
In addition to everything else everyone’s pointed out, they tend to give the creators of their shows, irrespective of fame or success, an absolute shit deal. [Pay upfront, possibly no residuals](https://nofilmschool.com/squid-game-residuals#:~:text=Netflix%20Made%20%24900%20Million%20on,in%20Residuals%20%7C%20No%20Film%20School), [but it’s complicated](https://www.wga.org/members/finances/residuals/hbsvod-programs).
Netflix makes money through monthly subscriptions. People who don’t watch anything tend to cancel. People who want to watch something bad enough subscribe. Popular shows like Stranger Things generate tons of subscriptions and keep subscribers going. Plus, they also have merchandise and sponsorships. Original shows are owned by Netflix, so they can host the show forever without paying royalty fees. This offsets much of the cost of making the show to begin with, especially in the long term. In theory they could also license the shows out to other platforms, although I don’t think they do that. They can also sell the shows if they want. Business people are pretty good at making charts and approximating their key numbers. They know the correlation between views and subscriptions and can measure the success or failure of a show based on those numbers (along with the production cost).
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